Snowflake has announced its intent to acquire Observe, a leading provider of AI-powered observability solutions, in a move set to expand its capabilities in the $50+ billion IT operations management market. The acquisition aims to integrate Observe’s platform directly into Snowflake’s AI Data Cloud, allowing enterprises to ingest and retain complete telemetry data at lower cost. This combination is designed to help organizations move from reactive monitoring to proactive, AI-driven troubleshooting.
Enhancing AI-Powered Troubleshooting
By combining Observe’s AI Site Reliability Engineer (SRE) with Snowflake’s high-fidelity data, teams can identify issues faster and resolve production problems up to ten times more quickly. The unified system correlates logs, metrics, and traces to detect anomalies earlier and pinpoint root causes efficiently. This approach shifts enterprise observability from manual, reactive processes to automated, proactive operations.
Open-Standard Architecture for Scale
The acquisition establishes a unified, open-standard observability architecture based on Apache Iceberg and OpenTelemetry, which Snowflake has contributed to over time. This architecture allows organizations to handle massive telemetry volumes using cost-effective storage and elastic compute resources. Treating telemetry as first-class data within the Snowflake AI Data Cloud enables consistent application of analytics and AI across business and operational data.
Cost-Efficient Full Telemetry Retention
AI-driven applications generate enormous volumes of logs, metrics, and traces, often forcing enterprises to rely on sampling or short retention windows to manage costs. Integrating Observe into Snowflake removes these compromises, allowing organizations to retain high-fidelity telemetry data while reducing overall observability expenses. This ensures teams have comprehensive visibility across their entire enterprise data estate.
Strategic Industry Implications
Analysts say the deal reflects a growing trend of merging observability and data platforms to improve efficiency and reliability. Observability is increasingly treated as a data problem rather than requiring specialized infrastructure, according to industry experts. Snowflake’s move highlights how enterprises can leverage existing data platforms and AI to address the challenges of operating complex, distributed systems.
Benefits for Enterprises
Observe’s developer-friendly tools complement Snowflake’s existing workload engines by providing real-time enterprise context and faster root-cause analysis. AI-assisted troubleshooting workflows enhance operational resilience and support dynamic, autonomous applications at scale. Together, the companies aim to deliver faster insights, improved reliability, and better economics for enterprise IT operations.
Market Impact
The acquisition will also strengthen Snowflake’s position in the growing IT operations management software market, which reached $51.7 billion in 2024, according to Gartner. By embedding observability into the AI Data Cloud, Snowflake can offer enterprises a scalable, open-standard solution for next-generation AI agents and applications. This strategic expansion underscores the importance of reliability as a business imperative in AI-driven enterprises.
Snowflake’s acquisition of Observe represents a significant step toward redefining enterprise observability with AI at scale. The integration of AI-driven troubleshooting, open-standard architecture, and full telemetry retention positions Snowflake to help organizations operate complex systems efficiently and cost-effectively. By combining their strengths, the companies aim to lead the future of observability for AI-enabled enterprises.